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ApartmentRatings.com: Critical for Marketing?

There are many different opinions about the value of social media in multi-family housing. Readers of this blog should be pretty aware of mine. But the one thing that everyone seems to agree on is that ratings sites are important. There’s a lot of debate about what to do with ratings sites, but everyone seems to agree there’s some “there” there.

So I thought it would be a good idea to get a sense of exactly how important ratings sites are. The first step I took was to dig up some research I had done for a client back in February. In it I wanted to identify whether there was a clear “category killer” or whether multiple ratings sites were important. In an admittedly un-scientific way, I just looked at 10 communities in the Washington, DC market.

ApartmentRatingsChart1 resized 600

Although this is a limited dataset, I think it makes it pretty clear that apartmentratings.com is the “category killer.” We can talk about Yelp, and we can opine whether Google+ will grow, but at least for right now, it’s clear that we really only have to focus on one rating site.

So the next step was to dig into ApartmentRatings.com. Given that I don’t have access to their database, I had to limit my search to the amount of time and energy to manually collect data. So I collected 147 markets over a broad range—small vs large, core vs non-core, sub-market vs SMSA, etc. For this analysis, I focused entirely on counts and penetrations; the notion being that high counts with high penetration mean we should care a lot and low counts and/or low penetration probably mean prospects won’t care too much (e.g. I take a restaurant rating based on 57 reviews a lot more seriously than one based on 6 reviews).

The results are fascinating (at least to me) and summarized below. The full white paper ApartmentRatings.com: Critical for Marketing or Just an Interesting Sideshow? is available free. Simply email me at This email address is being protected from spambots. You need JavaScript enabled to view it., and I’ll send it you. (I know—a sophisticated marketer should have a registration-based auto-download on a website, but I’ve just been too busy to set that up J so I’d rather offer this information up the old fashioned way as opposed to procrastinating further)

As an executive summary, here’s what I found:

There’s a large degree of variation by market in virtually all relevant statistics. There’s a small “head” set of communities with many (even hundreds of) reviews and a very long tail with relatively few reviews. Engagement varies significantly by both geographical region and demographic type of market (see Methodology section for description of market types). I wish there was a clear answer that the public is either highly engaged or not highly engaged, but that is simply not the case. The reality is:  Engagement varies by market. In most markets, engagement is modest at best. Even with modest engagement, there are individual properties that have significant engagement.

For the modern multi-family housing marketer, this suggests the following guidance:

ApartmentRatings.com is more relevant than many other social media channels; however, it’s typically not (yet) likely to affect leasing nearly as much more primary marketing and communication channels. Given the variation by market, it’s important to review the actual engagement of the markets a marketer is responsible for as well as the individual communities they support. Each marketer/salesperson should be aware of the number, timing and content of any reviews about their community so they can respond appropriately to prospects’ inquiries. Again, if you want to see the detailed methodology and results, just email me. I’ll be happy to send you a free copy of the D2 Demand Solutions white paper, ApartmentRatings.com: Critical for Marketing or Just an Interesting Sideshow?

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  • While this data is interesting, it fails to answer if apartmentratings.com is, in fact, critical to marketing. Simply identifying AR as a leader in quantity doesn't determine it's importance by any means - Do renters find AR a reliable source when making a decision? Does quality of reviews matter?

    For example...

    This University study suggests transparent, social engagement improves the quality of writing and reduces the amount of extreme (1 or 5 star) reviews. Something that AR has purposely turned its back to in favor of large amounts of free user generated content, regardless of validity.

    http://www.economics.neu.edu/zwang/Online%20Reviews.pdf

    As it stands, review sites like yelp make it difficult, if not impossible for spam bots to post fake reviews on its site. AR however, has no email verification when you sign up, no CATPCHA to determine if the user posting a review is in fact human, and allows anything to be posted without even the minimalist of vetting. I can't imagine how anyone could come to the conclusion that AR has residents' best interests in mind when they allow their site to be used as a way for spammers to make money.

    With that understanding, it's no wonder AR leads in apartment reviews. So should we run out and post replies to 1.5 million pages of negative (possibly fake) reviews? Probably not.

    Lets start educating our manager and residents about the importance of quality reviews.

  • When I worked onsite I was constantly having to answer questions about what people read on Apartment Ratings-even ratings that were posted prior to my company owning the community. So we did make a concerted effort to get positive reviews on (which we did) and we also educated our clients about the fact that people often only post when their upset and that while the ratings often had 'valid' data, they did need to be taken with a grain of salt. While we know that AR may not always have the "best" data, prospects don't know that-and assume that the info is correct.

  • Fair enough. But wouldn't the fact that the prospect showed up for the tour and asked about the reviews signify their doubt in its validity? It's the chicken or the egg - are we (operators) placing significance on AR because its influential or is AR influential because its playing off our fears and we're placing significance on it (more posts leads to higher SEO, etc)

    The answer here, I think, is not to ignore review sites entirely. But to promote review sites that handle our reputation responsibly and have our residents' best interests at heart. Clearly, AR isn't/doesn't. We are doing ourselves and our residents an injustice by continuing to blindly promote this site without digging deeper into the issue at hand.

  • Good points and questions-Jason.
    I echo your point on promoting alternate review sites-I think that's a great idea and is what my previous company did, to get other voices out there besides AR.

    As for me-I looked at AR about once a week to see where our score was tracking and to see if I could find patterns in what people were saying. I never used it as an active marketing source, where we would refer people there or tout our score-for me it was mostly putting my ear to the ground and trying to see what was going on.

  • Donald Davidoff

    Jason Velazquez

    Jason,

    People who tour despite seeing negative reviews do represent a segment that doubts the reviews and gives us a chance to respond. But what about the segment of people who simply don't show up because of what they read. That's hidden, but it exists.

    There are many things about AR I wish were different. At least they no longer allow vulgar posts (which they used to regularly allow and proudly seek cover under 1st amendment and "we don't create the content" arguments). The simply fact of the matter is that AR has 10X (or more) the number of posts than Yelp and 100X+ anyone else. So they rank well on many search terms. Making a concerted effort to promote other review sites might feel good, but it's about as effective as voting for a 3rd party candidate for President--if everyone would do it, it would change the game; but almost no one will do it because it's not likely to be anything other than a protest vote.

    Until Google decides AR posts are low quality (an unlikely event), the site is the only review site that moves the dial.

  • The segment that doesn't show up is hidden. And instead of attempting to figure out what that number is, we given in to our fear and have willingly provided AR with the thing we worked the hardest for - our reputation and quality customer service. No questions asked.

    Things aren't changing because our executive are lazy. They walk up to the podium at conferences and regurgitate the same nonsense they heard from the last person. No one is actually doing any real research, just seeking out data that supports their fear-based decisions.

    Things can change! Yelp wasn't always as reputable as it is now. They've been sued for extortion - twice back a few years ago. It took the restaurant industry to stand up to them before they changed their ways. If you have some free time, I wrote about it in detail here:


    So want can we do as operators to change this?

    1. Block your Google adwords from appearing on AR's site. 95% of their revenue comes from ads we pay for!

    2. Boycott AR affiliates. AR works with some of the biggest vendors we use every day - Rent.com, Court Furniture, etc. Let your vendors know if they partner with AR they won't receive business from your company.

    3. Stop posting replies and stop asking residents to post positive reviews on AR. Instead, write a transparent, straight forward customer service pledge to your residents explaining why your org doesn't not participate and what you will do in instead. If you must solicite reviews, ask them to post on yelp.

    4. Last but not least, roll out a customer service program that provides residents with a direct line to the regional manager. Resident post on AR simply because they want to vent and AR gives them instant gratification. We did this at The Collier Companies and the results were incredible. Major reduction in online reviews when residents feel like they're being heard.

  • Sorry didn't mean to bold all that. I'm on my ipad. Lol

    Also here's the link for the yelp blog I wrote:

    http://www.multifamilyinsiders.com/multifamily-blogs/extortion-hypocrisy-and-the-man-in-the-black-hat-the-big-business-of-online-reviews.html

  • Doug Miller

    Donald Davidoff

    Jason, I appreciate your passion for the topic and the time you have taken to share your thought on this. That said, I don't know if you are aware of what AR is doing in a major effort to gain a better cross section of resident opinions. The Verified Resident Program is dramatically impacting what is being posted - with feedback from "verified residents" (and the postings are noted as such, just as TripAdvisor, OpenTable, etc. do). If you would ever like to talk further, as clearly you have a great interest in the topic, please email me at dmiller@satisfacts.com and we can plan time to chat. Thanks so much for your passion for the industry!

  • Doug Miller

    Very interesting post and white paper Donald. Was fascinated to see that you named ApartmentRatings.com the "category killer" when it comes to ratings and reviews. While there are ratings on other sites like Yelp, and certainly those ratings are likely going to grow over time as ratings/reviews have become so important to consumers (including all of us!), AR, its postings and the 53 million unique visitors in 2012 is clearly top dog. On the ILS site, two weeks ago a client shared that since beginning to really work the site (including Manager Center and the Verified Resident Program) rentals citing AR in the first four months of 2013 were up 40% over the entire year of 2012. Some may not realize that AR has become a significant ILS - most of the 53 million visitors are not there posting ratings (although more than several hundred of residents do every day - with the figure growing substantially since the Verified Resident Program rolled out). Along those same lines, the 2012 SatisFacts Index for sources used when shopping showed that AR ranked as one of the top ten advertising sources, with the citations nearly doubling in the last three years.

  • (In response to your comment reply to me. Some reason it doesn't let me reply back directly)

    Doug,

    I am well aware of the verified resident program AR has been pushing.

    Here's the thing. You can't make your fortune off the reputation of an entire industry, then decide you want to go "legit" after 1.5 million pages of negative content and expect all to be forgiven. This wasn't an oversight. This wasn't incompetence. This was a calculated strategy that used anonymity and negativity to become one of the largest profiteers in the Adwords network.

    Lets be honest, Internet Brands, LLC. Isn't exactly the most reputable company on the web. They own the largest forum software (vBulletin) in the world; they are no stranger to comment spam. Yet, AR, to date, has no email verification when you sign up, No CAPTCHA, and complete anonymity. Anyone with a low level understanding of programming can create a script that posts hundreds, if not thousands of fake reviews with ease.

    Doug, I appreciate your outreach. I really do. And you seem sincere about your desire to improve this situation. Unfortunately, you are fighting on the wrong side, in my opinion. AR and Internet Brands, LLC are a cancer on this industry. It's only a matter of time before they're exposed for what they really are.

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